HSBC to consult Bulgaria on the Belene NPP for a fee of €2.7 mln

The British HSBC Bank has won the tender for a consultant for the Belene NPP, offering to make a financial analysis of the project for a fee of €2.7 mln. If its analyses prove that the construction of the Belene NPP is economically sound, it will get an additional 0.95% of the final price for the project’s implementation. HSBC will be able to make assessments and evaluations of the work on the Belene NPP over the next two years. With these criteria, the company was selected as financial consultant by the Bulgarian Energy Holding (BEH), sources close to the negotiations told Klassa.
HSBC’s analysis will be the basis for the Government’s decision on whether to build a second nuclear power plant in Bulgaria or freeze the project.

The contract with the consultant HSBC was expected to be signed yesterday, remotely, by exchange of signatures by fax, announced the Ministry of Economy, Energy and Tourism. No official ceremony was projected either. By the time Klassa went to press, the contract had not been endorsed but it is expected to become a fact within days.

In November 2010, the UK bank was selected as financial consultant for the Belene NPP after winning a tender in competition with the Rothschild Bank, Societe Generale, KPMG in a consortium with McGuire, Argil and Ernst & Young. Energy Minister Traicho Traikov predicted then that the first results of HSBC’s work on the restructuring of the project and the setting of its price should be ready by the end of May.

“The bank will determine the acceptable price escalation of the project,” said PM Boyko Borissov, cited by BNR. According to him, two months after the signing of the contract for consultancy services with HSBC, the financial and economic conditions for the project will be clear, as well as the acceptable price escalation in relation to the base price of €3.997 bn with which Atomstroyexport won the tender in 2006. He repeated his statement that the Belene NPP will be a successful project if the electricity generated there can be sold abroad at competitive prices.

HSBC experts will present their forecasts for the market of the electricity generated by the future Belene NPP, as well as a financial model which is missing at present, sources close to the negotiations told Klassa. The Bulgarian society will be informed of each step for the structuring of the project.

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